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Formal Financial Planning

Old 12-15-2008, 04:21 PM
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Default Formal Financial Planning

Does anyone use the services of a Financial Planner/CFP to actively produce and monitor an in-depth financial/estate plan for a fee? I would be interested to hear your thoughts on the value of the service.

Feel free to PM me if you would rather not post openly. I'm not interested in marketing. I just want to know how high net worth consumers view the service.
Old 12-15-2008, 04:56 PM
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Default RE: Formal Financial Planning

Once I got over 1/2 million in my IRA I lost my nerve for "doing it myself." I retained a small local firm (three guys) and they make all investment decisions for a % fee. They've done very well for me, and as a side, are willing to sit with me every years and review everything else. I'm within 5 yrs of retirement now, and have a relatively simple asset mix that's easy for us to review, so it doesn't cost them any to review my finances.

Like the rest of the world, I've seen significant and dramatic paper losses to my IRA. 30% down in the past six months. I never complained once when they triples my money over ten years, so I don't blame them for the recent losses. If you plan on blaming your fee basis investment advisers, don't hire them.

When I retained them in 1991 I told them if they could get me 8% year in/out I'd be happier than a pig in crap. Of course, they scoffed at my "conservative" expectations and proudly projected a minimum of 10 or 12%. Afterall, that's what the "market" has done over the long term. If I've made 8% after this recent collapse, I'd be surprised, but it's probably around that for the past 17 years.

I highly recommend them. Don't hire anybody and expect to "beat" the averages.
Old 12-17-2008, 09:21 PM
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Default Re: Formal Financial Planning

I think you ONLY hire someone to beat the averages. If you just want the average, buy Index funds.

The only value they add is in beating an average, and possibly ironing out some volatility.
Old 12-18-2008, 07:06 AM
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Default Re: Formal Financial Planning

Yes, my wife and I utilize the services of both an asset manager (CFP) and and an estate planner. In our situation an asset manager is a must have. They do charge a significant fee, but it allows us peace of mind to know that someone is actively managing our investments. In addition to the asset management, they also manage our life insurance policies. All of our life insurance policies our held in tursts. You need to insure that payment of all premiums comes out of the appropriate trust. The estate planner was a one time costly set up fee (wills, trusts, etc.). With the amount of taxes we pay, I'll be damned if I am going to hand over 50% of my estate to Uncle Sam. They do handle the once a year crummy letters to the benneficiaries of the trusts.

If you have a significant estate, I would recommend having different people mange the investments and the estate planning. Tax laws change frequently and you need to have a professional who knows what he is doing in order to protect your estate.
Old 12-18-2008, 01:10 PM
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Default Re: Formal Financial Planning

Salty Dog, who manages the people managing your financial affairs?
Old 12-18-2008, 05:47 PM
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Default Re: Formal Financial Planning

Get it in trust if you have some one to give it to. Hire a firm to manage the trust to your liking. Then work with them to make a long term plan to your liking . The stock market is for people who look to the future and not to every day pay offs this is what's happening today!People want to have instant money from selling short or in some sort of fund. Get good advice and be prepared to settle in for some great long term returnes.
Old 12-21-2008, 11:02 AM
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Default Re: Formal Financial Planning

Hey! Lest ye forget...."everyone works in his or her own best interest".

Putting your money, especially your life savings, in the hands of someone else is "foolish" to say the least.

Better to learn the finance game and hold the cards yourself.

Bernie Madoff comes to mind.



Ray, Tennessee 2180DLX Carolina Skiff 90HP Honda
Old 12-21-2008, 11:24 AM
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Default Re: Formal Financial Planning

rayteagarden1 - 12/21/2008 1:02 PM

Hey! Lest ye forget...."everyone works in his or her own best interest".

Putting your money, especially your life savings, in the hands of someone else is "foolish" to say the least.

Better to learn the finance game and hold the cards yourself.

Bernie Madoff comes to mind.



Ray, Tennessee 2180DLX Carolina Skiff 90HP Honda
Ray - I agree with you IF you have the aptitude to learn. Unfortunately, many wealthy families do not have that aptitude and look for professional help. My original post was more related to Financial Planning than Investment Management.

The Madoff debacle is a real eye-opener. There were red flags that were not properly investigated by regulatory agencies which makes it even worse. There were also structural problems which added to the risk, such as no separation between custodian and manager. In hindsight, it was bound to happen.
Old 12-21-2008, 12:36 PM
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Default Re: Formal Financial Planning

Ray,

You speak of "learning the finance game," but I am fairly certain your are also a proponent of day trading or buying and selling AAPL on volatility? I could be confused, but in any case that is not necessarily a good way to "manage" significant sums of money. I would say that no more than 10% of your funds should be actively managed in that strategy. There is simply too much risk and a total absense of diversification with that strategy.

If you really want to "learn" finance, spend the time on proper education. At least at that point you can understand the underlying stategy of many of the books that you read and the fundamentals of the companies that you invest in. Another plus of proper education is a better understanding of risk and return. Many people do not realize how much "risk" they have actually signed up for in their investment strategy.

In any case, a CFP ,or similar, and a good probate attorney is probably a great idea for most people. In any case, both can help with the estate process and at a forming an investing strategy.

I will say that it is not the best idea to just turn over your money to someone. Many investment managers are bound to follow a particular strategy or investment objective. It is best to match your current situation with the appropriate money manager (or ETF if that is the way you want to go).

Be active in your money management, but do not be scared to take advice from trusted sources and advisors. If anything, go with your gut and your own preferences and not those of other people.

BTW, I am not in the investment industry, but I do feel there is value in formal financial planning, proper estate planning, and asset management.

Good Luck

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